You may have already heard the news: Many tax numbers that are adjusted annually for inflation did not change for 2016. For example, the 401(k) contribution limit remains at $18,000 this year, plus another $6,000 if you're celebrating your 50th birthday during 2016. SIMPLE plan contributions remain the same for 2016 also. You can save up to $12,500 in your SIMPLE account this year, plus another $3,000 if you're age 50 or over.
Though the limits haven't increased, taking full advantage of allowable contributions and any amounts your employer matches is still a good idea. Contributions you make to employer-sponsored retirement plans reduce your taxable income because your employer deducts the amount you specify from your paycheck before taxes. You might also be able to benefit from a savers credit of up to $2,000.
If you're already contributing the maximum, you may want to consider opening an individual retirement account this year. You can have both types of retirement plans, and a Roth or traditional IRA will help you diversify your retirement holdings and save additional tax-deferred or tax-free money. Just remember that your traditional IRA contribution may not be tax-deductible if you're eligible to participate in your employer's plan.
The maximum amount you can contribute to an IRA during 2016 is $5,500 (plus $1,000 when you're age 50 or older).
Give us a call for information about these and other tax-sheltered accounts that can offer significant breaks for 2016. We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicago land area.
Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at firstname.lastname@example.org.
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.
Art Bradley CPA & Janice Papais CPA
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
To better serve our clients and friends, to keep you up-to-date and informed, our blog is a resource for tax tips and overall accounting related articles. We hope you find this useful!